SoftBank CEO Vows to Cut Debt With 'Berkshire Hathaway-Like' Strategy

SoftBank founder and CEO Son points to new tech fund as means to slash debt levels.

SoftBank (SFTBY) CEO Masayoshi Son has vowed to trim debt at the Japanese wireless carrier he founded after it swelled past $135 billion last quarter following the purchase of U.K. chip designer ARM Holdings.

Son said his new $100 billion tech fund, SoftBank Vision, which he announced in October in partnership with the Public Investment Fund of Saudi Arabia and compared to Warren Buffet's Berkshire Hathaway, would drive the company's major investments going forward and keep debt from piling onto SoftBank's balance sheet. In fact, Son said he would mimic the Buffet/Berkshire model throughout the whole of the company.

"Do we have too much debt?," Son asked rhetorically during a Monday press conference in Tokyo. "To proceed with [SoftBank 2.0 - the company's global expansion drive], we cannot increase our debt any further ... We need to build up our defences before making any more offenses."

Son added he was now in discussions with several wealth sovereign funds who had expressed interest in the new venture.

SoftBank said Monday its debt rose to ¥14.3 trillion ($137 billion) in the three months ended September 30 from ¥12.37 billion in the previous quarter. Net income at the Tokyo-based group, however, soared 140% year on year to ¥512.1 billion even as revenue declined 3.1% to ¥2.15 trillion.

SoftBank attributed the debt increase partly to its purchase of ARM, which involved ¥1 trillion in bridge financing. The £24 billion ($30 billion) takeover of the chip designer, whose know-how is adopted in around 95% of smartphones worldwide, was initially announced in July and completed on September 5.